Results of the economic crisis in Spain show the rich get richer

Over the years of the crisis, the number of households whose wealth exceeds 1 million euros has increased by 100,000; while the incomes of common Spaniards, as well as the number of jobs, have declined, Eduardo Bayona, a columnist, concluded in Público, a Spanish online newspaper, on January 31.

Bayona stressed that during the three crisis years (2011-2014), income inequality in the country has increased dramatically. According to the Government of Spain, the number of households, whose income (after deduction of debts) exceeded the mark of 1 million euros over the years, has increased by 100 000 (from 589,500 to 689,100), which is 16.9%

During the same period, the total wage amount of Spaniards fell by 14 million euros, the number of unemployed has increased by 170,000 people, while in 450,000 families there was not a single working person.

The columnist referred to a financial survey of Spain’s Central Bank, which also indicates that in 2011-2014, the number of households, whose net worth exceeded 1 million euros, increased from 3.27% to 3.75%. In other words, before the crisis, the worth of one out of 30 families exceeded 1 million euros, and, after the crisis, it is now one out of 26 Spanish families with such worth.

Analyzing a longer period, the expert quoted various financial statements according to which, from the end of 2009 to the third quarter of 2017, funds including cash at disposal of Spanish families have decreased by almost a third (from 91,809 to 61,458 million). Meanwhile, the aggregate amount of deposits has increased (from 724,100 to 790,200).

The expert also noted that since 2010, the Spaniards began to borrow less. Over the past 17 years, the volume of household loans has decreased by a quarter, from 902,466 million to 711,548 million euros. However, Bayon stressed that with a general saving trend the number of long-term loans has decreased, with a simultaneous growth in the number of short-term consumer loans.

Bayon also drew attention to the current situation: in the first quarter of 2017, following court orders, 33,900 families were evicted, and another 30,600 court cases on recovery of mortgage debt have been initiated. 13 million people (almost 28% of the population) live at risk of poverty. Slightly more than 50% of the unemployed receive unemployment benefits, whereas, in 2011, this figure was almost 80%. The expert also argued that half of the young population does not have a job, and those who work do not get paid well.

In November 2017, the European Commission listed Spain as the first country in terms of income inequality. Spain is followed by Bulgaria, Greece and Lithuania. According to the European Union report, approximately 30% of the EU countries have not restored pre-crisis (until 2007) indicators of economic income equality, and at the same time, Brussels describes the situation in Spain as “critical”.

In addition, according to the Spanish Youth Council’s data as of the end of December 2017, the unemployment rate among people under 30 years reaches 29.7%. Only 7.6% of those employed at the age of 16-29 are hired under a permanent employment contract. 20% of those under the age of 29 live separately from their parents.